Permit vs no permit on interior construction

[Ralph Ace]

I showed a home and asked the listing agent why the home went contingent and then got relisted.

The agent said the inspection went bad because there was no permits on any work done.

The home had fully remodeled kitchen, bathrooms, flooring, etc.

The listing agent said the contractor has done everything to code and has years of experience.

Do you need permits on everything done inside the home and will inspection fail with no permits.

Can anyone provide any feedback on this topic.

[Jennie Berger]

Hi Ralph: 

We are developers and licensed general contractors with the city of Chicago. To emphasize what @Jay Hinrichs said--and yes I'm exaggerating but trying to drive a point home--you basically need a permit to breathe in this city. :) Do contractors (and homeowners) do construction work on their home without them? All the time. Do we? NEVER. 

If you're a contractor--or homeowner--considering selling in the near future (or strictly renovating with the intent to sell NOW)--you'd be shooting yourself in the foot to not get SOME type of permit. Depending on the amount and type of work, an 'easy permit' may suffice. (ie: A so-called 'over the counter' permit, which is easier to obtain, cheaper, and still covers a fair amount of renovations that don't include anything structural or heavy MEP work.) So, if this contractor you're referring to just replaced kitchen cabinets, painted, and sanded and refinished floors, eg, an easy permit would totally have covered all of that work. This all begs the question: if the contractor is so experienced, why WOULDN'T he have gotten a permit in the first place?

Be that as it may, are you asking about whether a home inspection will pass? Or inspection(s) by the city? In our experience, a home inspector has never asked for city permits. Only the buyer's attorney asks for a full report, as well as proof of the permit showing all inspector signatures, after we are under contract. 

I'd be remiss if I didn't add the following: We work on the North and NW side of the city. Our price point is mid-level (700-900k ARV). Though it 'shouldn't', it might actually make a difference. I've heard of quite a few contractors working on properties on the South side, and maybe other less expensive areas of Chicago, without permits. And those renovated homes get sold with no problem... Where was this property located?

I wish this was black and white. Nothing in Chicago is. Unfortunately. Not sure if this was helpful. Hopefully some others will chime in soon with more insight...